PLAN

Introduction........................................................................................ Section 1- Diagnostic of Agricultural Sector in Tunisia.................... 1/Tunisian agriculture trumps............................................... 2/ Weight of agriculture in Tunisias economy.................... 3/ Tunisian agriculture constraints....................................... Section 2- Policy of development of the Tunisians Agriculture Sector................................................................................................. 1/ Stakes of the sector 2/ The internal reforms 3/ The external reforms Conclusion Bibliography

INTRODUCTION

No one can deny the crucial role of agriculture in preserving human being. As a practice of cultivating the land and rearing animals, agriculture was the first activity used to satisfy the basic needs especially on food. Despite the emergence of other economic sectors which are recent in comparison with agriculture, as industry or telecommunication, agriculture is still a sector on which we rely to create regional development and improving the creation of wealth all over the world. In Tunisia, agriculture has a significant weight, starting with Roman Empire, when Tunisia was known as the granary of Roma, crossing the colonial period, when settler invaded our fertile land, ending by the post-independence period, when agriculture was and still being, considered as one of the pillar of the economy since it is the source of development of all the other sectors. Despite Tunisian agriculture has the opportunity to enjoy with many trumps which reinforce its weight in the economy, it still faces many obstacles. Different policies had been carried to promote this sector; among them we find the failed cooperative experience. The new circumstances of liberalization of economy necessitate a well elaborated policy. Thus, special care has to be paid to the promotion of agriculture sector through many reforms.

Section 1- Diagnostic of Agricultural Sector in Tunisia :

1/Tunisian agriculture trumps: The hydraulic infrastructure: in fact, agriculture consumes a large quantity of hydraulic resources. Tunisian water resources potential is 4800 million cubic meters per year. Nearly 68% of the countrys ground water is being tapped. Promulgation of an arsenal legislative: over the last decade, much incentives and encouragements have been granted to the agricultural sector to increase production and exports. Encouragement for the agronomic research and vocation of high specialized qualifications in agriculture. Thanks to theses measures, agriculture registers a rate of growth in the last thirty years larger than the demographic evolution rate (3.7% per year against 2.35%). Tunisia has a total land area of 164,150 Km2, the country arable land is estimated at 4071.4 million ha and 360,000 ha of land are irrigated. The main agricultural wealth of Tunisia lies in cereal, corps, market garden corps, citrus fruit, date growing and fishing. Tunisia is the second largest exporter of olive oil in the world after the European Union. Dates are second in position behind olive oil in exported horticultural goods. Although these trumps and the large production, the agriculture is a nonperforming sector as it stills exist a gap with the demand and the potentialities (the average of actual return is about 50% of the potential).

2/ The weight of agriculture in Tunisias economy: The agriculture sector plays an important role at the level of global economic results, agriculture accounts 13% of GDP (2005), around 10% of exports of goods and 16% of the workforce is employed in agriculture. In 2005, the climatic conditions have an impact on the harvest of cereals. Agriculture and fishing enjoyed a considerable regression of the value added of the sector of 5%, in real terms, against a progression of 10,1% in 2004. Thus, the contribution of this sector to economic growth became negative -15. 4% against about 21% the year before. Investments increased by 2.3% in 2005 against 11.5% the previous year representing 10.4% of total gross fixed capital formation. 53% were the work of the private. They invested, essentially, in the irrigation, raising, arboriculture and the purchase of agricultural machinery and equipment. As for foreign trade, in spite of the increase of cereal imports, notably of barley and hard wheat, and of the receding of olive oil exports, following the decrease of the production the, food balance degaged for the second consecutive year, a surplus. It reached 132.3 MDTS against 190.1 MDTS in 2004. The rate of coverage of imports by exports enjoyed a light recession, from 118,3% in 2004 to 112,1%.

3/ Tunisian agricultures constraints:

A/ The problematic of natural resources : Future and the durability of the agricultural activity depends on water, land and halieutic resources.

 The water: It has a central role in the Tunisian agriculture. Tunisia has neither important hydraulic resources, nor a good geographic repartition. The most of its resources are located in the north mainly in Medjrda Valley, around which we find the half of irrigated lands. Since the independence, the financial resources allocated presenting more than 40% of the agricultural investment help to mobilize more than 60% of the mobilizable water. The land: The agriculture in Tunisia suffers also from the small size of the agricultural lands. Tunisia knows a division of fertile land due to the rules of heredity. The share of land between heirs lead the effort of cultivation and exploitation of the land lower and reduce the productivity. the halieutic resources: Over exploitation of high commercial values species. Under exploitation of pelagic resources (blue fish). Weakness of exploitation in the zones with difficult conditions. B/ The social problem : The ageing and the illiterateness of the farmers (average of age is 53 year now against 50 year in 1980 and are illiterate). The decrease of labor demand for agriculture: we have to point out that the contribution of agriculture and fisheries to the total labor demand expressed by the whole of the economy is regressing, varying from 46% in 1966 to 39%

in 1975, 21,6% in 1989 and 22% in 1997 (Ministry of economic development, 1999 ). The immediate consequence of this regression is the acceleration of the dramatic urbanization phenomenon: as the urban population has depassed largely the rural population which still remains growing at a slower rate, agriculture has to be more productive and more organized in order to satisfy the needs of the increasing number of urban people concentrated in a few large towns. Precarious employment in agriculture: The examination of the

composition of occupied working population according to the branch of activity and professional status shows that more than 60% of agricultural working force is family labour. Moreover, employment supplied by the agricultural sector is precarious since 40% of farmers have more than one job and up to 60% of the total hired labor work less then 6 months in agriculture. It is advisable to announce that the rate of the permanent employees in the agricultural sector is very weak in Tunisia and represents only 7% of the total of the agricultural permanent work (90% of the number of the permanent workers are ensured by the farmers and their home helps). C/The economic problem : The financing problems : The financing of agicultural investment is assured by the public funds that present 58.9%, the bank loans (7.5%) and the own funds of farmers (33.6%) (2003).

The reasons of these difficulties to borrow funds are essentially: - The divide up of the agricultural lands, a survey structure realized in 1994 shows that the exploitations less than 10 ha represent more than 73% of the total agricultural exploitations. - The variability of the climate and the lack of an adequate system of assurance the problem of water competition between sectors of agriculture and tourism : Tunisia encounters the main problem of the countries of the eastern Mediterranean basin: it is the problem of water competition between the vital economic sectors of agriculture and tourism. Agricultural irrigation in Tunisia consumes more than 68% of the total water resources. Currently, the water demand of tourism sites is growing rapidly. Both economic sectors are of vital importance for the region: while agriculture provides the living basis for most of the rural population, tourisms carriers hope for significantly increasing wealth and employment in the region. Therefore, the water competition between the two sectors damages the social and economic foundations of the region. It forces farmers to abandon agricultural lands and raises the investment costs for new tourist projects.

Section 2- Policy of development of the Tunisians Agricultural Sector :

1/ Stakes of the sector: The main challenge that Tunisian agriculture faces is the question of self sufficiency. The policy of development of the sector must put into effect this goal. Moreover, in the new area of globalization, domestic agricultural prices are no longer determined exclusively by participants in local or even regional markets. An increase in agricultural international prices would directly lead to an increase in domestic prices. This would change the agricultural terms of trade, which are the primary determinants of real output and incomes in rural areas. The relative prices of agricultural goods also exert a powerful influence on food security and migration, and thus on poverty levels in both rural and urban areas. Furthermore, Tunisia is a member of the W.T.O and also has signed an agreement association with the E.U. So, serious problems are facing our agriculture such us: The risk of OGM products threatens Tunisian consumers, even if Subsidies will be more reduced that discourage farmers who suffer

the debate is not very important in Tunisia. from traditional equipments, so a question of competitivity will be treated.

Tunisian exchange is specifically oriented to E.U market, so we

have to look for other partners to ovoid vulnerability. Imports of European agricultural and food products account for approximately 40% of total imports. As for the European market, this takes up about 70% of Tunisias agricultural and food exports. The outlets for Tunisian exports are largely dependent on EU decisions as to its own agricultural policy. 2/ The internal reforms : A/The internal state protection : The high level of dependency of agriculture to exogenous conditions is probably one of the reasons leading the Tunisian government to put in place a large number of administrative regulation mechanisms, the aim being to ensure adequate income levels for farmers, national self-sufficiency for certain products and low prices for staple commodities. These mechanisms are deployed by means of four instruments of economic policy: The development of agricultural infrastructures and incentives for The mobilization and protection of natural resources . Training for farmers and growers combined with dissemination of Protection of the domestic market against foreign competition . Policy directed at encouraging private-sector investment has almost always been based on the artificial lowering of interest rates. Tax benefits granted to farmers and growers for the acquisition of agricultural equipment and

private investment;

new technology and methods;

machinery, added to capital investment subsidies (for irrigation systems for example) has also been used as incentives for private investment. Investment in agricultural infrastructure falls within the remit of government. The marshalling of water resources and the protection of agricultural land against erosion and desertification are also issues for the public sector. Through its land and water conservation programs, Tunisia has in this way proved able to limit the land loss caused every year by erosion and desertification, losses which amount to some ten thousand hectares annually. The small size of individual agricultural holdings, usually run by families, also means that improvements in farming methods and technology and the search for plant varieties and animal species suited to the severe climatic conditions of Tunisia are properly the tasks of the state. Participation from the private sector is very actively sought, but is still in its infancy. Information outreach groups have been set up in all agricultural regions, but have been widely criticized, largely because of the large number of administrative bodies involved. As for scientific research, this has proved its worth by producing high-yield wheat varieties particularly well suited to Tunisia. B/The control of prices : There are two concurrent regimes for the regulation of producer prices: Under the first (which relates particularly to cereal crops and milk), at the beginning of each agricultural campaign the government sets a minimum guaranteed production price. This is generally higher than the world price.

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Under the second, the price is also fixed, but unlike the first regime, the producer has no choice but to sell his produce at that price to a publicly owned collecting body. This is notably the case for sugar beet and raw tobacco. The guarantee of a minimum price for production has ensured that the producers of these products have continued to enjoy sufficient income levels, protecting them against fluctuations in world prices. The State also subsidizes consumption of agricultural input products in order to encourage intensive agriculture and to keep production costs down. Actually, subsidies on agricultural inputs such as chemical fertilizers and pesticides are eliminated. Water distribution at the irrigated margins of agricultural land is billed at prices far below the actual cost of operating the water infrastructures. Since 1986, Tunisia has been conducting a program of structural adjustment aimed particularly at reforming the agricultural sector by shifting its prices closer to those in world markets and reducing production subsidies . C/ Agricultural structural adjustment program : The ASAP aims to intensify the contribution of the agriculture in the growth of the economy and to create new jobs. Tunisia started an outfit of economic and institutional reforms so that she ameliorates the general environment of the sector that can favorite and push the role of the private operators and give back the role of the market in the regulation of the prices. The main axes are the following: The instauration of a coherent policy of prices and grants to eliminate the distortion caused by the old system of prices characterized by a full

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intervention of the state. So, most of the grants are eliminated and many agricultural products had been liberalized. The rationalization of the intervention of the state with a progressive disengagement of the state from the competitive activities to the private sector such as the collect of cereal, the commercialization of olive oil Amelioration of the effectiveness of the policy of expenses and the public investments. The rationalization of the natural resources utilization. 3/ The external reforms : A- Tariff and non-tariff policies before the agreement with the EU: The non-tariff policy: The main instrument of non-tariff protection was the imposition of quantity restrictions on imports. The implementation of quotas for imports and state monopolies for the administration of import operations (the national offices for cereals and oils) had the effect of stepping up the protection of local production, since tariff barriers were considered to be insufficient alone. Applied in the 1960s, the consequence of this policy was largely to isolate the local from the international market, thus attenuating the impact of international fluctuations on domestic prices. Where other categories of product were concerned, imports required a license issued by the Ministry of Trade, plus adherence to a stringent set of specifications related to technical and health-related standards. The tariff policy: Tunisias customs regulations lay down three categories of duty: minimum, general and intermediate.

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However, the last two categories are rarely used and the minimum rate is therefore the base rate applicable to all imports with the exception of those covered by preferential tariff regimes. B/The agreement to set up an EU-Tunisia free trade area : The foundation of the partnership agreement is the principle of reciprocity. It provides for the removal of tariffs on all products with the exception of agricultural produce. This dismantling of tariff barriers is more or less unilateral given that the vast majority of Tunisian industrial products are already freely available in the European market. This is not yet the case for the whole range of agricultural products, which are generally subject to specific arrangements, and in some cases affected by barriers to entry into the European market. Only on January1, 2001 were the two partners signed an additional agreement in order to more open mutually their markets for agricultural products. This agreement stipulates that the two partners will increase the preferential quota accorded for each of them in the other market. These measures provide for the implementation at European level of the preferential status for some products already granted by France to third Mediterranean countries (early potatoes, tomato concentrate, oranges other than fresh produce). It is also planned that at certain times of the year free access will be granted to new products such as market garden produce. In return, Tunisia has given an undertaking to afford the European Union preferential access for its cereals, meat and dairy products and to consolidate its GATT-related concessions.

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CONCLUSION
The situation of agriculture today is the result of a special care and a along process. The state relies in the agricultural sector to promote the global economy: agriculture is the key of the development of the nation. The state has been conscious of the new circumstances and tried to invest hardly to reform the sector and regain to it its real weight in the modern economy. The government is called to be up to date with the international evolution; especially with this new context of globalization so that it can takes profit from the opportunities in the agricultural field and avoid the bad measures inappropriate with our conditions.

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BIBLIOGRAPHY

Annual report,2005, central bank of Tunisia June 2006. Tunisia, stability and growth in the new millennium, euromoney books, 2003. Forum, newsletter of the economic research, December 1994. Budget conomique 2004, agriculture et pche, ministre de lagriculture, de lenvironnement et des ressources hydrauliques. Evaluation des ralisations du dixime plan (2002-2004), rapport du comit dagriculture, avril 2004. Atlas des sols tunisien, 1999. Agriculture , in la Revue de l Entreprise n64, avril 2003, p52-56. Internal and External Reforms in Agricultural Policy in Tunisia and Poverty in Rural Area, in Paper Written for the Research Medal Competition, December 2001.

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